Most business owners searching for commercial space make a reasonable assumption: the broker showing them buildings is working for them. Often, that assumption is wrong.

In commercial real estate, two fundamentally different types of brokers operate in every deal. One works for the landlord or seller. The other works for the tenant or buyer. The difference affects what information gets shared, how negotiations get handled, and what the final lease or purchase price looks like.

This article explains who each type of broker represents, how each gets paid, and what that means practically when you are looking for office or industrial space.

The broker showing you buildings is not automatically your broker. In many cases, they were hired by the landlord before you ever walked in the door.

The Landlord’s Broker: Who They Work For

When a property owner lists a building for lease or sale, they hire a listing broker. That broker’s job is to fill the space at terms that work for the landlord, ideally the highest rent, the fewest concessions, and the least negotiating friction.

This is a legitimate service. Landlords need representation. But the listing broker’s legal and professional duty runs to the property owner, not to you.

Here is where it gets complicated: listing brokers often show their own listings to prospective tenants. They may be the first broker you speak with when you call a number on a sign or search a property database. If you tour a building with them and move forward without hiring your own broker, you are negotiating against someone whose job is to protect the other side.

LEGAL NOTE: In Arizona, a broker representing the landlord is required to disclose that relationship. Ask every broker you meet: who are you representing in this transaction? The answer should be unambiguous.

The Tenant Rep Broker: Who They Work For

A tenant representative, or tenant rep, is hired to represent the person leasing or buying space. Their job is the opposite of the listing broker’s: negotiate the lowest rent, the best concessions, and the most favorable lease structure for the tenant.

A dedicated tenant rep does not carry listings. They search the full market on your behalf, including buildings you may not find on your own, and they go into every negotiation with a single obligation: get the best outcome for you.

For business owners and owner-users buying a building, the equivalent is a buyer’s representative, a broker whose job is to find the right property, evaluate it honestly, and negotiate the purchase price and terms in your favor.

A tenant rep’s compensation comes from the transaction, but their professional obligation runs entirely to the tenant. Those two things are compatible, when the representation is exclusive.

How Each Type of Broker Gets Paid

Both types of brokers are typically paid from the same source: the landlord pays a commission out of the lease value at close. This is how commercial real estate commissions have worked for decades, and it is why many tenants assume broker representation is free to them.

The practical reality is this: if you bring your own tenant rep, the landlord’s total commission budget splits between the two brokers. If you do not have your own broker, the listing broker often keeps the full commission, and still works for the landlord.

In either case, you are not writing a check to a broker directly. But having your own representation does not cost you more. The commission structure is built into the deal regardless.

COMMON MISCONCEPTION: “I’ll save money by going directly to the listing broker.” In practice, removing the tenant rep rarely reduces rent. The landlord keeps the commission savings. You lose the representation.

Side by Side: What Changes in Your Deal

The Dual Agency Problem

Dual agency, where one broker represents both the landlord and the tenant in the same transaction, is legal in most states with disclosure. It is also, by definition, a conflict of interest.

A broker cannot fully advocate for both sides simultaneously. In practice, dual agency tends to produce outcomes closer to what the landlord wanted, because the landlord was the broker’s client first. The tenant gets representation in name only.

Some large commercial firms do this routinely. A broker at Firm A shows you buildings from Firm A’s listing portfolio. Both sides of the transaction run through the same office. The firm collects both sides of the commission. The disclosure gets buried in paperwork.

The cleaner arrangement: a broker who carries no listings in the transactions they work on your behalf, so the conflict never arises.

Ask the broker: do you have any listings you might show me? If the answer is yes, ask how they handle the conflict when you tour one of their own buildings.

Three Questions to Ask Any Broker Before You Start

You do not need to be a commercial real estate expert to protect yourself in this process. You need to ask three questions up front:

Who are you representing in this transaction, me, the landlord, or both? The answer should be clear and unambiguous. If it is not, that is informative.

Do you carry listings for any of the properties we might look at? If yes, how do you handle that conflict? A broker representing you exclusively should not also be the listing agent for the same buildings.

What is your experience with this property type and submarket? A broker who mostly handles retail, or who works primarily in Phoenix, is not the same resource as someone who works Tucson industrial or office deals full-time.

Why This Matters More in a Tight Market

When vacancy rates are high and landlords are competing for tenants, the gap between good and average representation is smaller. Landlords are motivated. Deals get done.

When vacancy is low, as it has been across much of the Tucson industrial market in recent years, the landlord holds more leverage. Asking rents hold firm. Concessions shrink. Free rent periods get shorter. Tenant improvement allowances tighten.

In that environment, the quality of your representation directly affects what you pay and what terms you sign. A broker who knows the submarket, has relationships with the landlords, and understands what comparable deals have looked like in the past 12 months is worth a great deal more than one who is showing you listings from a database and splitting the commission.

MARKET CONTEXT: When a submarket runs below 5% vacancy, tenants are competing against each other for space. The landlord’s broker knows this. Your broker should too, and should be running comparable lease data before you make your first offer.

A Note for Owner-Users and Buyers

If you are buying a building rather than leasing one, the same principle applies with higher stakes. Purchasing commercial real estate is typically the largest transaction a business owner makes outside of their core business itself.

The seller’s broker has one job: close at the best price and terms for the seller. Without your own buyer’s representative, you are negotiating alone against someone who has done this many times and whose professional duty runs the other direction.

A buyer’s representative will run a comparable sales analysis, identify off-market options, flag inspection issues early, and negotiate purchase price and seller concessions on your behalf. The seller typically pays both brokers’ commissions, the structure is similar to leasing.

For owner-users exploring a 1031 exchange, this representation matters even more. The timing constraints and replacement property requirements in a 1031 require a broker who understands the structure and can move efficiently within the deadline.

Working with a Broker You Haven’t Vetted?

Before you tour a single building, ask one question: who is this broker’s client, you or the landlord? The answer determines everything about how your deal gets structured.

Commercial Real Estate Group of Tucson represents tenants, owner-users, and buyers exclusively. We do not represent landlords or sellers in the same transactions.

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